This story was originally published by ProPublica.
Sanitation Salvage, the embattled private trash hauler recently suspended from operations by New York City regulators, has decided to surrender its operating license.
In a letter sent to city regulators Tuesday, lawyers for Sanitation Salvage said the company would cease operations “forthwith.”
Officials at the Business Integrity Commission, or BIC, the city agency charged with overseeing the private trash industry, did not have an immediate public response. The BIC this year declared the company, one of the largest in the city, a threat to the public after two fatal crashes and a rash of safety violations documented by the agency’s investigators. The company returned to operations in October, but it remained under investigation and was required to agree to the installation of a monitor to oversee its daily operations.
Emails sent to the owners of Sanitation Salvage and their lawyers were not immediately answered. The company has steadfastly defended its performance, saying it placed the safety of its workers and the public first. When the city suspended Sanitation Salvage’s operation in August, lawyers for the company said the action was misguided and unlawful.
In the letter to the city, lawyers for the company again complained about the city’s action and said the company’s decision to surrender its license was a result of the suspension.
“As we repeatedly warned, BIC’s unlawful and ill-advised decision to suspend Sanitation Salvage’s license on August 24, 2018, without any prior notice or opportunity to be heard, has doomed the Company as a viable going concern,” the lawyers wrote. The lawyers added that Sanitation Salvage had been left “with no choice but to surrender its license rather than incur further operating losses.”
The letter suggests that the company was looking to sell prior to Tuesday’s developments. Indeed, one person familiar with Sanitation Salvage’s plans told ProPublica this week that the company had had initial talks with at least one prospective buyer.
The prospect of Sanitation Salvage being sold had alarmed the City Council member who chairs the Sanitation Committee, as well as a number of advocates pushing for broad reform of the private trash industry. The company, which is based in the Bronx, had been found liable by the federal Department of Labor for hundreds of thousands of dollars in unpaid wages to its workers. Advocates wanted to make sure the company couldn’t sell to avoid paying.
It was unclear Tuesday what will become of the city’s investigation of the company, and whether it might still be able to depose employees and perhaps issue fines. Any sale of the company would have been subject to conditions imposed by the BIC. City law does not place limits on the conditions that the agency can set. Past sales of some companies have been contingent on owners agreeing to lifetime bans from the industry.
In recent months, ProPublica has reported on Sanitation Salvage’s troubled record of labor and safety violations, including involvement of its workers in two deaths. ProPublica and Voice of America revealed that Sanitation Salvage workers lied to the authorities about one of the fatal crashes, which resulted in the death of a 21-year-old off-the-books worker in November 2017. The two company employees on the truck that ran over the worker, an African immigrant named Mouctar Diallo, told the police that the dead man was an unknown homeless man who had jumped aboard the truck. In April, the same driver was involved in a second crash in which 72-year-old Leo Clarke was killed while crossing the street.
The BIC ultimately barred the driver from working in the industry.
Current and former workers of Sanitation Salvage also complained about dangerous job conditions, with drivers and other employees working shifts as long as 18 or even 21 hours. Extra workers were often hired off the street at a rate of $80 per shift.
In 2015, after an investigation, the federal Department of Labor concluded that Sanitation Salvage owed workers $385,000 in unpaid overtime accumulated over the previous three years. Workers said the company installed what they called a sham union that served the interests of Sanitation Salvage’s owners. Records show the union was long run by mobster James Bernardone, identified by law enforcement as a soldier in the Genovese crime family. In 2013, the National Labor Relations Board found that Sanitation Salvage’s management unlawfully threatened to fire workers who opposed the union.
The BIC eventually suspended Sanitation Salvage’s license, saying the company posed “an imminent danger to life and property.” The agency cataloged an array of violations including undisclosed workers, unlicensed drivers, a majority of drivers pulling long shifts far exceeding federal regulations and 58 collisions over the last three years.
“This company has demonstrated time and time again that they value profit over the lives of New Yorkers and the well-being of their workers,” Mayor Bill de Blasio said in a statement at the time of the suspension in August.
Sanitation Salvage has not responded to detailed questions over many months. Sanitation Salvage said the claims of unpaid overtime were without merit, according to a Department of Labor Wage and Hour Division investigator’s report. The company refused to pay the $385,000, claiming the workers were seeking to be paid for time actually spent hanging out with friends. When the department chose not to take the company to court, the issue ended.
The union that represents Sanitation Salvage’s workers has not responded to requests for comment about its history with the company or the findings of the Department of Labor or the NLRB.
One person with knowledge of Sanitation Salvage’s recent operations said the company had lost as many as half of its customers after the suspension this fall. And just this week, the city’s public housing agency said it was moving to cancel contracts it had with the company.
Natalie Grybauskas, a spokesperson for the BIC, said in a short statement Tuesday night that the agency had received the letter from Sanitation Salvage and was working to make sure the company’s customers got their trash collected.